Bihar HC Makes Firm’s ₹50.75 Lakh GST Refund Claim Depend On Appeal, Directs Authority To Consider Retrospective ITC Amendment

In the underlying writ petition, the High Court set aside an appellate order dated 30 November 2022 and consequential recovery, remanded the matter to the appellate authority, and directed refund of ₹50,75,214 with interest

The State sought review, arguing that Sections 118 and 150 of the Finance (No. 2) Act, 2024 had not been brought to the Court’s attention when the writ petition was decided

Section 118 inserted sub-sections (5) and (6) into Section 16 of the CGST Act, while Section 150 addressed refunds of tax paid or input tax credit reversed in light of that amendment

The State also relied on the corresponding Bihar Goods and Services Tax (Second Amendment) Act, 2024

Recovery had been initiated by a DRC-13 notice dated 29 December 2022, and the amount was deposited by the Bihar State Building Construction Corporation on 9 July 2023

Section 118 of the Finance (No. 2) Act, 2024 inserted sub-sections (5) and (6) into Section 16 of the CGST Act, 2017, concerning input tax credit for specified financial years and in cases where registration is cancelled and later revoked; the amendment was given effect from 1 July 2017

Section 150 provides that no refund shall be made of tax paid or input tax credit reversed that would not have been paid or reversed had Section 118 been in force at all material times

The Court also noted the corresponding Bihar amendment, which it described as similar or identical and effective from the same dates

No precedent or separate review standard was discussed.

The Court considered the amendments material because Section 118 operated retrospectively from 1 July 2017 and Section 150 restricted refunds by reference to the effect of that amendment

Since the recovery was initiated in December 2022 and the amount was deposited in July 2023, the Court directed the appellate authority to consider those provisions when deciding the pending appeal

It did not decide whether the amendments ultimately defeated the taxpayer’s claim to refund; instead, it made the refund claim dependent on the appeal’s final outcome

The appellate authority was directed to consider the relevant provisions of the Finance (No. 2) Act, 2024, and the claim for refund of ₹50,75,214 was made subject to the final outcome of the appeal